Earlier this year, shares of premium mattress maker Tempur-Pedic fell from a lofty $87 to just $20, at which point the stock was brought up on this site as a potential value investment. Yesterday, investors were offered the opportunity to sell these same shares for a 50% premium to the price on that day.
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Communicating with management is something many shareholders like to do. But it's not always easy. My belief is that if you're not calling on behalf of a name-brand Wall Street firm, most managers have little time for you. Consider the treatment experienced by a value investor who tried to communicate with the CEO of Solitron Devices, a company whose shares trade at a large discount to its net current assets.
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Readers may recall that last week an interview with Manhattan Bridge Capital CEO Assaf Ran was carried here. In our conversation, I implored Mr. Ran to buy back shares at the large discount to book value at which the company trades, rather than continue to invest at the company's current rate of return. Mr. Ran promised to take my request to the board, and publicly announce the board's decision. That decision was announced yesterday.
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As central banks have continued to employ stimulative measures, proponents of Austrian economics are sounding the alarm. To the latter group, policies such as quantitative easing distort market prices, resulting in malinvestments that will have consequences (e.g. a housing bubble fueled by low rates that shifted too much capital from productive uses into housing, the effects of which we have been feeling for a few years now). To understand this philosophy better, I recently read Human Action by Austrian economist Ludwig Von Mises.
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The Dolan Company (DM) operates what appear to be several high-margin, monopoly-type businesses. And yet the company trades for a P/E of just 5! What gives?
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Though it might seem absurd to value investors, there are market participants out there who buy (sell) securities only because they have gone up (down). They profess the superiority of momentum investing. Are they right?

In decades past, making such a determination was a laborious undertaking, available only to those academics with the time and inclination, and the financial firms with the scale to be able to profit from such an effort. Today, however, the proliferation of powerful computing tools has democratized this process. Below I discuss a quick test of momentum I conducted in the shares of a highly liquid (Apple) company, and one that isn't so liquid (Manhattan Bridge Capital).
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I recently spoke with the CEO of embattled firm Manhattan Bridge Capital (LOAN). Mr. Assaf Ran and his company have been discussed on this site before, mainly due to the large discount at which the company trades relative to its book value. The firm has had a tumultuous couple of years, involving a rejected buyout offer from a disgruntled shareholder, large restricted share grants to its majority shareholder, and shareholder lawsuits over some of the company's actions. Assaf Ran and I discussed these topics and more.
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Companies are susceptible to losing their customers as a result of disruptive technologies. In The Innovator's Dilemma, Christensen demonstrates that companies are overtaken despite doing everything right - listening to customers and investing in the highest-return projects. By studying the disruptive process, Christensen shows how companies can defend themselves from disruptive technologies.

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Companies are susceptible to losing their customers as a result of disruptive technologies. In The Innovator's Dilemma, Christensen demonstrates that companies are overtaken despite doing everything right - listening to customers and investing in the highest-return projects. By studying the disruptive process, Christensen shows how companies can defend themselves from disruptive technologies.

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Full House Resorts (FLL) has all the makings of a great value stock. With a market cap of only $50 million against double-digit millions in free cash flow and a strong net cash position, the company looks seriously undervalued.
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Activist investor Chuck Gillman recently recommended the book Extreme Value Hedging to me. In Chuck's opinion, making predictions about the future is incredibly difficult, so his preference is to profit from changes that can be made to improve poor capital allocation decisions. The book was a good introduction to many of the opportunities and challenges facing activist investors.
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Companies are susceptible to losing their customers as a result of disruptive technologies. In The Innovator's Dilemma, Christensen demonstrates that companies are overtaken despite doing everything right - listening to customers and investing in the highest-return projects. By studying the disruptive process, Christensen shows how companies can defend themselves from disruptive technologies.

Read more...

Companies are susceptible to losing their customers as a result of disruptive technologies. In The Innovator's Dilemma, Christensen demonstrates that companies are overtaken despite doing everything right - listening to customers and investing in the highest-return projects. By studying the disruptive process, Christensen shows how companies can defend themselves from disruptive technologies.

Read more...

Companies are susceptible to losing their customers as a result of disruptive technologies. In The Innovator's Dilemma, Christensen demonstrates that companies are overtaken despite doing everything right - listening to customers and investing in the highest-return projects. By studying the disruptive process, Christensen shows how companies can defend themselves from disruptive technologies.

Read more...